Court rules refusal to accept resignation amounts to bonded labour and sets a precedent for employee rights under financial duress.
In a landmark ruling, the Kerala High Court has directed TRACO Cable Company Limited, a state public sector undertaking, to accept the resignation of its Company Secretary, Greevas Job Panakkal. The court found that the company's refusal to accept the resignation violated constitutional protections against bonded labour. This decision comes after the petitioner, who had served since 2012, faced salary defaults beginning October 2022 and cited personal obligations as reasons for his resignation.
The judgment, delivered by Justice N. Nagaresh, addresses key issues surrounding employer obligations, employee rights, and the statutory role of a Company Secretary under the Companies Act, 2013. The petitioner, who resigned on March 18, 2024, was denied release by the company citing its critical financial position and lack of a suitable replacement. However, the court highlighted that financial difficulties do not justify forcing an employee to work against their will.
The court emphasized that an employer must accept an employee's resignation unless there are contractual violations or ongoing disciplinary proceedings. It further noted that linking resignation acceptance to financial necessity amounts to bonded labour, prohibited under Article 23 of the Constitution of India. This judgment underscores the legal obligation of employers to respect employee autonomy, especially in statutory roles like that of a Company Secretary.
Justice Nagaresh also ordered the company to settle all outstanding dues, including salary arrears and terminal benefits, to the petitioner. The judgment is expected to have significant implications for employee rights, particularly in the public sector, where financial constraints are often cited as reasons for employment disputes.
Bottom Line:
Employer cannot refuse to accept resignation of an employee without valid reasons such as violation of contractual conditions or pending disciplinary proceedings. Refusal to accept resignation without justification amounts to bonded labour prohibited under Article 23 of the Constitution of India.
Statutory provision(s): Article 23 of the Constitution of India, Companies Act, 2013
Greevas Job Panakkal v. TRACO Cable Company Limited, (Kerala) : Law Finder Doc id # 2853447
